Chase Manhattan Bank, with 200 million lines of mainframe code to get compliant, recently discovered that it has problems: ancient PC's (noncompliant) that are running its operations. Nobody knew they were there.

This is not just a problem with Chase Manhattan. It's a problem -- or a potential problem -- with most large, complex systems. But most managers have not budgeted $250 million to repairing these systems. Chase has. They found these machines while working on inventory.

It has less than one year to finish the initial code repair. Then it has testing -- 40% to 70% of the overall y2k repair project. Then it must fix any glitches. Then it must test again.

Anyone who mentions these unpleasant facts in public is a "gloom and doomer," a "nay-sayer," an "apocalyptic." It's someone who doesn't believe in the miraculous ability of "good, old-fashioned American ingenuity" to solve any problem.

That's me.

This is from INVESTOR'S BUSINESS DAILY (Jan. 6)

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When Chase Manhattan Corp. did an inventory of its computers recently, it got a big surprise.

Vital functions at the New York-based banking giant were running on computers that no one -- not even their information technology department -- knew existed. Banks of servers, computers that manage office tasks such as printing and sharing files, went unnoticed for years.

"There were circa-1988 PCs out there that people (use every day) but forget that they exist," said Ian Macfadyen, the bank's senior vice president. "Servers easily become forgotten pieces of architecture." . . .

Before Chase can fix the problem systems, it needs to know what hardware and software is in the field. Previously, the firm had people walk around the offices with a clipboard, writing down what equipment was where, a tedious process. . . .

Chase only included 2,000 PCs in its initial sample, but the program soon will be expanded to inspect all of the firm's 15,000 PCs. It's a complicated task, since the bank has many flavors of systems. . . .

The biggest challenge for Chase Manhattan is figuring out what to do with all the data Asset Insight collects, says Macfadyen. A two- person team has been created to study the inventory full time. They will put together an action plan, prioritizing the systems that need to be fixed.

"We've never really had this kind of data before," he said. "We need to figure out how to make best use of it."